Abby Burns (00:15):
From Advisory Board, we're bringing you a Radio Advisory, your weekly download on how to untangle healthcare's most pressing challenges. I'm Abby Burns. It seems like every health system in 2026 is betting on the same strategy to drive sustainable growth for their organization, win commercial patients. It makes sense, right? This is where the margin is. But there are only so many commercial volumes to go around.

(00:38):
Today, I'm sitting down with Advisory Board experts, Shay Pratt and Emily Heuser, to unpack the avenues that health systems are pursuing to win these volumes. Spoiler alert, we're going to talk about how not every ambulatory asset is created equal, the high bar for differentiating a service line strategy. And we're going to talk about an area I'm hearing more and more about this year, and that's direct to employer. For each of these, I'm going to ask Shay and Emily for their take on how viable or reliable an avenue it is in terms of driving health system margin growth. Here's our conversation. Emily, Shay, welcome back to Radio Advisory.

Shay Pratt (01:16):
Thanks for having me.

Emily Heuser (01:17):
It's great to be back.

Abby Burns (01:19):
And today we are here to talk about health system growth, sustainable health system growth, as I know you would both push me on immediately. So I want to sort of set the scene here. We're here in May 2026, median health system operating margin has been hovering somewhere around 1%, sometimes higher, sometimes lower for several months at this point. Around a third of systems are operating in the red. Some systems are having the opposite sort of turn of fortune. How would you describe the pulse, the tone, maybe even the feasibility of health system growth in 2026?

Shay Pratt (01:58):
I think that organizations are recognizing that they need good growth in the future to mitigate the impacts of HR1, as well as just the general trends that are shaping their margin performance right now. I think they have three clear priorities that they're telling us that they want to go after, and that's pretty universal. 90% of organizations are saying the same things. They need to find more growth in commercially insured individuals, their services, the services they need. 90% of organizations are prioritizing ambulatory care expansion and investment, and just shy of 90% are prioritizing service lines. That's from our strategic planner survey this year, and it doesn't get much more unanimous than that.

Abby Burns (02:38):
Yeah. 90% is pretty strong agreement.

Emily Heuser (02:41):
I think the other part of strong agreement is just that growth continues to get harder and harder to come by. So everyone's agreed that these are the three places to look for it, but the traditional stones that they keep trying to turn over to find it are not revealing any new and untapped growth, and that makes for a frustrating outlook for them.

Abby Burns (03:01):
And when I think about sort of the three avenues that you said, Shay, commercial patient volumes, ambulatory, and service line, I actually wonder if we can consider those things all commercial patient strategies. Is that a fair reframe?

Shay Pratt (03:18):
I think so. I mean, these categories are not mutually exclusive and I think that the need for commercial volume is a thread that runs through kind of everything because it's kind of a financial imperative to have enough balance in your payer mix that you can reach a certain level of financial health. However, I would say that prioritizing service lines, people would be glad to have procedures from Medicare patients, for example, at the same time that they also need commercial growth. So there's heavy overlap across the three areas.

Abby Burns (03:42):
Yep. That makes sense. And it especially makes sense when you think about it at an organizational level. For my organization, what are the avenues that I have available to me? When we look at an ecosystem level though, very few organizations exist alone in their market. So right away, when I hear there's 90% overlap in the strategy that health systems are pursuing to grow, flags are going up over here in terms of how viable is this really. And when we layer the focus of commercial patients in there in particular, I'm wondering about what is your risk assessment for how viable it is to focus on winning zero sum commercial volumes as a make or break growth strategy?

Shay Pratt (04:23):
Well, the red flags went off for us as well as we were looking at the results of the planner survey. One of the challenges that health systems I think need to confront is that the piece of the payer mix pie that is commercially insured volume is actually stable, if not shrinking. And in many markets, it is a distinctly shrinking piece of the pie.

(04:43):
So if organizations are prioritizing commercial business, they're going to have to compete for more market share versus try to grow that volume organically. And there are very different things you would do in a market share context versus an organic growth context. A lot of really challenging dynamics right out of the gate when you start to examine the likelihood of growing commercial volume. It's going to be hard.

Abby Burns (05:06):
Yes. Not everyone has the luxury of operating in Tampa where commercial volumes are net growing. So what does this mean for how you ran at your growth research this year?

Emily Heuser (05:17):
We looked at each of those three growth priority areas and tried to understand how much of a viable path to sustainable growth is there in that growth area. And as we dove in and had conversations with organizations, we heard a lot of the same strategies coming up again and again, a lot of the same frustrations coming up again and again.

(05:40):
And it led us to identify a hard truth for each one of these different buckets that really erodes some of the underlying assumptions about what growth looks like in this area, compared to the traditional playbook. And that strategy leaders, health system leaders will need to confront in order to actually unlock new sustainable growth today. So we think about these hard truths and we coupled them with a mindset shift of how do you need to think differently in order to approach these different areas?

Abby Burns (06:17):
So let's walk through each of these areas in our conversation today. And I am mindful that we don't have all of the time in the world, so I imagine there are further conversations to be had on each of these areas. But I at least want to get a sense for what are some of the hard truths that strategy leaders, executive leaders, maybe even operations leaders, and others, you tell me, need to be thinking of when they're planning, not just for the end of 2026 because somehow that's already halfway over, but as we look really ahead to 2030 and maybe even beyond.

(06:48):
And let's start with ambulatory care. Because when we look at where health system revenue is coming from, which is one of our traditional metrics for measuring growth, increasingly, it's outpatient. If we think about where the numbers stand as of end of 2025, I think it was 57% of health system revenue comes from the outpatient book of business, which is a lot bigger than a few years ago. It's certainly where patients want to be when they have a choice.

(07:13):
But I understand it's really hard for health systems to balance the financial equation of investing in ambulatory, while continuing to operate and hopefully drive profit from their core engine of the hospital. When we're thinking about sustainable growth, where do you want to push health systems to think in 2026?

Shay Pratt (07:32):
Well, for ambulatory care, I think there's a huge tension. All the growth is in ambulatory. Site of care shift is an unstoppable force. There's nothing that's going to reverse that at all. At the same time, health systems look at ambulatory, and I totally sympathize, it's a much different and tougher business in many respects than acute care. There's a lot of volume, but the margins are maybe more difficult to produce in a reliable or consistent way. A lot of organizations have ambulatory assets that ostensibly lose money. And there are incentives in the payment system that not every ambulatory site is created equal.

Abby Burns (08:15):
So how can they actually capitalize on this ambulatory growth to drive margin?

Shay Pratt (08:21):
Well, when we dug into this conundrum that I think every health system faces, it can be a little overwhelming. There's so many different services you can actually invest in in ambulatory. So already it's just like an extremely complicated puzzle. We try to simplify it in a way. And we basically structured a hypothetical network, and said, okay, well, what are the different jobs we need ambulatory services to do for us financially, and how would we group those? And our framework, we came up with three different business entities in the ambulatory space.

Abby Burns (08:54):
Okay. What are they?

Shay Pratt (08:55):
The first one are, for lack of a better term, margin drivers. These are things that are profitable. They do have attractive economics. These are things that you probably anticipate, imaging, outpatient surgery, infusion, interventions, anything that's more, I think, procedure oriented.

Abby Burns (09:11):
Yeah, more lucrative.

Shay Pratt (09:13):
Yeah. The second bucket is less margin drivers than more just volume access engines. These things are what enabled the organization to create a lot more new patient relationships. Primary care, urgent care, consult heavy medical specialties. You're seeing a lot of patients, a lot of volume. And the goal is not to generate a margin of above all else. The goal is to create sticky long-term relationships with patients and to direct that downstream volume that they need. It's that directing volume part that I think gets lost in a lot of the financial analysis of today's ambulatory assets.

Abby Burns (09:52):
And that a lot of health systems aren't necessarily great at following through on. We've got our margin drivers, we've got our growth and access engines. What's the third category?

Shay Pratt (10:02):
Third category is what we call system stabilizers. These are things that you might invest in that aren't really attractive financially, but they actually help you avoid even more costly stuff downstream. So example might be outpatient behavioral health. If outpatient behavioral health can help you avoid ED admissions for behavioral health issues, or it can help you prevent downstream admissions that also may not pay well or also very costly. The system stabilizer's job is to help you avoid worse performing services elsewhere. And so those are the three buckets that we start to group services in and start to play with in terms of our model.

Abby Burns (10:43):
Yeah. So when you're thinking about your ambulatory strategy, to use your words from earlier today, not all ambulatory assets or investments are created equal. Think about the job to be done differently. Emily, when we think about translating this to sort of the economic question of how do we sustainably invest in ambulatory, how do you think about the job to be done of each of those three groups that Shay just outlined?

Emily Heuser (11:06):
It tees up the need for much more of a portfolio approach to looking at your ambulatory network. So there's no ability to look at each of these sites with an individual P&L anymore. We've got to be taking a more holistic approach to how we evaluate them, how we balance them, how they are interconnected, and how changing something at one of these sites is going to have downstream impacts across the other types of categories. It also creates different types of imperatives for each of those three types of assets within that portfolio.

Abby Burns (11:41):
I imagine that part of this is putting different financial expectations on these different types of assets. You're not going to be looking for the same thing from a system stabilizer as you are from a margin driver. Are you able to quantify that?

Shay Pratt (11:55):
Sort of. The way we thought about it is this way. The ambulatory network should be intentionally imbalanced. So what I mean by that is that, on the margin driver section, that should probably be around 25, 30% of your overall volume. That should be almost 100% of your profitability in the ambulatory network.

Abby Burns (12:14):
Wow, that is high.

Shay Pratt (12:15):
Yeah, a big differential. On the access and growth engines, remember these are primary care, urgent care, some medical specialties. This should be probably 60% of your overall ambulatory network volume, but I think you'd celebrate if you broke even on those services.

Abby Burns (12:30):
Okay. That tracks with primary care.

Shay Pratt (12:31):
Yeah. The goal of those is not necessarily to break even as the first outcome. It is to generate, pursue direct patients through the system to the things they need without being a kind of one and done type of ambulatory service. One of the things we heard from a lot of the organizations that have been in the ambulatory business for years is the benefits of co-location, and just really limiting the number of single site, single purpose ambulatory locations. Because they tend to not generate any kind of system connection or impact.

(13:02):
If you have an urgent care center that's sort of tucked away somewhere, and they're only doing urgent care, it's very likely a patient might walk out of there, just never come back to the system again, even though they have additional needs. But if you have a co-location, you could just literally introduce somebody to the next service they need. That's real. And we've heard that from a lot of organizations over and over again.

Abby Burns (13:21):
Yeah. Big focus on site optimization, especially for ambulatory locations.

Shay Pratt (13:25):
Yeah. But being able to direct care and to influence consumer choice is really what is going to make the ambulatory network pay for itself and be more powerful than just looking at individual site P&Ls.

Abby Burns (13:38):
So we've talked about you got the 20 to 30% of the volume that should be margin drivers, and really they should be driving 90 to 100% of margin. For our more access engine, we've got about half to 60% of volumes, and you're hoping to break even. Where does that leave system stabilizers?

Shay Pratt (13:56):
Well, I think mileage will vary. I'm speaking at a kind of general, if you live in Pleasantville, USA, this might be your breakdown, but if you're heavy into value-based care contracts, then you probably want a lot more system stabilizers. These are things that help avoid more expensive stuff utilization downstream, so makes a lot of sense to have that. But this is sort of our general concept as somebody that has growth opportunity across the board in ambulatory care, is generally fee for service, and is generally in a competitive market.

Abby Burns (15:36):
Since our goal here is to evaluate these growth avenues in terms of their ability to generate margin accretive growth, sustainable growth for health systems, reliability check, can ambulatory investment drive margin growth for health systems?

Emily Heuser (15:53):
Yes, but not if we continue to use the same playbook that we have for the past several years, several decades. And the change that's required is going to be hard, but it is doable. It's just going to take thinking about the assets in your network in a new way, thinking about the strategic intent of them in a different way, and thinking about the job to be done for each of them in a different way.

Shay Pratt (16:17):
Yeah. To me, I think it totally is possible. And remember that the average health system, over 58% of their revenue is now outpatient. And so the question for me is how can you actually make the ambulatory network, with such a big part of your revenue, also such a big piece of your margin performance? And it comes down to operations and operating the network in a way that you probably haven't done before.

(16:39):
Frankly, we need to be swarming the network with a lot of operators and strategic thinking and service line leadership. This needs to be a shared area of accountability. What strikes me about the kind of network construction that we talked about, if you have a primary care network, for example, that isn't hitting a threshold of referral retention that you think is good for your system, then that probably means that your margin drivers are also emptier. And that's also a bad outcome.

(17:04):
So the interrelatedness, interconnectedness of the network overall really requires a different kind of approach to operations and performance management that I think a lot of organizations probably would admit that they lack today.

Abby Burns (17:18):
Yeah. I was going to ask, how would you evaluate the maturity curve of where health systems stand today on that level of sophistication?

Shay Pratt (17:25):
I do find that a lot of organizations are still kind of figuring out why they're in this business and what is the kind of key driver to investment and what their overarching goals are. The organizations that have been in it forever really understand the financial payoff of the ambulatory networks, and they're really doing their best to create convenient care close to the patient that has a lot of options, but at the same time, they manage those networks at a pretty high standard.

Abby Burns (17:58):
Right. It's not just they understand the financial value, they actually realize the financial value.

Shay Pratt (17:58):
Yes. And it's completely baked into their overall strategic priorities with the organization. A lot of organizations right now just have a collection of assets that they've inherited/acquired over time. But of the dynamic that I described of your margin drivers and your volume, your access generators, I think every organization should evaluate where they currently are. So I realize I'm asking people to kind of do a big spreadsheet analysis of all their ambulatory services, but I think it's helpful to group them in the three buckets that we talked about, and see where they stand relative to maybe a kind of hypothetical ideal. And that might help understand your gap to goal.

Abby Burns (18:35):
Yeah. And you've given us the hypothetical ideal in the percentage ranges that you gave us. That brings us to the next growth avenue you mentioned, which is service lines. And this is the first one that I expected you to say. Service lines are traditionally sort of known as the growth engines of the health system. So it makes sense that they're a big part of this conversation.

(18:54):
We also know systems tend to focus on the same service lines to grow as their neighbors, their competitors, their peers. And so if I think about, okay, we're focused on commercial lives, same patient population, we're focused on same service lines, seems like we're talking about literally the exact same volumes that systems are betting on for growth. Is that what we actually see in the numbers?

Emily Heuser (19:17):
We know that everyone seems to have a pretty similar portfolio of service lines. When you ask them what service lines they're prioritizing for growth in the years ahead, they're going to list cardiovascular, oncology, ortho, maybe neuro, GI, but very similar set of services there.

(19:33):
And what's interesting is when you look at the volume outlook for those, not only is it the same slice of pie that they're all going after, but in many cases, it's a shrinking slice of the pie. We did an analysis using our market scenario planner that showed that the majority of counties in the US are going to see decreasing volumes in those top service lines on the inpatient side over the next five years, and those volumes that are left are becoming more complex, less desirable from a margin perspective.

Abby Burns (20:02):
What does that mean for how systems think about service lines as part of overall sustainable growth? And I'll add in as part of commercial patient volume growth.

Emily Heuser (20:13):
Well, they should still be thinking about service lines. I'm not trying to suggest that service lines don't deserve to be part of a growth strategy overall or a commercial growth strategy. But it means that they need to think about how they're taking their service lines to market and to consumers and employers in ways that are different than they used to.

Abby Burns (20:34):
What does that actually mean to think about this differently?

Emily Heuser (20:37):
The stakes are higher when it comes to differentiating your service lines to consumers right now. I think that if you were in a room of service line leaders, and asked how many of them are banking on subspecialization to differentiate their cardiovascular service line, or you ask how many of them offer online scheduling or say that they won't have surprise billing messages, they are all going to raise their hands. And that's because the things that differentiated service lines yesterday have become table stakes today.

(21:11):
This is where we get back to the idea of a hard truth, that everyone is competing for similar service line volumes, that growth is at a stalemate there, and your service lines are probably not as differentiated as you think. Because when it comes to actually standing out in the crowd today, what's going to be required is health systems solving key access challenges for patients at the point in their care journey when they are deciding if they want to pursue care, where and when they want to get there.

(21:43):
And most service line leaders think that they're improving access. They think they're improving the financial experience. And they are, but they aren't solving those challenges for consumers at the point of their care journey where they need us to.

Abby Burns (21:54):
Yeah. You're talking about the sort of patient centricity, like really leaning into patient centricity as the thing that opens the door or points you toward the differentiation opportunities.

Emily Heuser (22:04):
Yes. To an extent that is probably uncomfortable for a lot of service line leaders, strategists, healthcare organizations in general. Because we're talking about potentially remaking or rethinking some of the traditional processes and ways of operating in the health system in order to meet patients at that point in their care journey.

Shay Pratt (22:26):
I remember 10 years or so ago when we were thinking about what's really important for consumers and healthcare, a lot of it had to do with subspecialization. So it made sense that service lines would run at how many subspecialties they have, and their complexity and their technology upgrades and all that. That is not what people are prioritizing right now. People prioritize access and affordability, and then everything else is way distant down the list.

Abby Burns (22:52):
So when we look at future planning for patient centricity, do you have an example of leaning into this discomfort and providing this patient centricity in a different way?

Emily Heuser (23:03):
I have examples, but I'll be honest that they are hypothetical because we looked and we really didn't see organizations who were trying some of these differentiators at scale. So I'm talking about things like expedited access lanes, or time-based guarantees for different stages of care. Or on the financial experience side, things like all in-one pricing guarantees that are patient facing, or the opportunity to pay for access. And it's understandable that we are not seeing some of those things. I think there's a lot of conversation to be had about which ones are actually right answer if they are possible, but things that are indisputably impactful for differentiating yourselves from the other service lines in your market.

Abby Burns (23:46):
Yeah. I think you used the word radical earlier, or maybe it just came into my brain as you were talking. Those certainly sound like sort of radical options. But worth having the conversation and pushing the boundaries of our thinking by entertaining them.

Shay Pratt (23:59):
A lot of this work, we tried to be thought provoking, at least put some ideas forward that we know haven't really been widely considered. They may not be great ideas, but they are ideas that help with the kind of stalemate that Emily mentioned earlier. There is a huge access issue right now of specialty care. I think a lot of the organizations, the executives we talked to, they told us if we could solve our access issues, we would probably be winning a lot more in the market right now. And I think that's true. Yet we haven't seen a lot of movement along this end. So we tried to push the envelope here and suggest some kind of wild ideas at the same time, but I think some of them are really good and should be considered.

Abby Burns (24:35):
So before we move on to our third and final avenue for growth to look at today, same question, which is can service lines drive margin growth for health systems in 2026 and looking forward?

Emily Heuser (24:47):
Yes, but it's going to be uncomfortable. It is not a set it and forget it. I have an oncology service line and it's going to generate growth for me. It's going to require organizations to have tough conversations and be innovative around addressing these patient friction points.

Abby Burns (25:05):
So let's lean into this discomfort. And I want to talk about a final avenue for access. Earlier you talked about focusing on commercial patient volumes. And I actually want to zoom us right to a place where we can find high concentration of commercial patients. Specifically, I want to talk about direct to employer strategies. Because this is something I've been hearing a lot about from providers in varying level of detail, but certainly really strong interest. I want to get your take on where direct to employer fits into this conversation around sustainable health system growth.

Shay Pratt (25:39):
If organizations are thinking about how to increase their commercial book of business, employer sponsored insurance is the biggest category. It begs the question, what can we do to get closer to the employer sponsored insurance population? And a lot of organizations have asked us about direct to employer contracting as if that might be a potential growth strategy or growth tactic that could help with the current dynamics.

Abby Burns (26:05):
And can it?

Shay Pratt (26:07):
Not really. I don't think it's a great growth strategy, and can break down to why that is. But I think prioritizing direct to employer for volume and margin growth for the average health system is probably not a winner. It might work for maybe 1 to 2% of those that pursue this idea.

Abby Burns (26:23):
1 to 2% of systems.

Shay Pratt (26:25):
Yes.

Abby Burns (26:26):
The rare few. I like you jumped right ahead to the ending question, which is how reliable of a growth avenue is it? So now let's reverse engineer this. Why not? At a high level, okay, we've got providers interested in employers. We've got employers who are really fed up with their healthcare costs and the growth in their healthcare costs. It seems like a natural fit. Why is this not a good fit for driving sustainable health system growth?

Shay Pratt (26:50):
Well, first of all, I think employers and health systems are in two different places right now. A lot of large employers already have direct provider partnerships. They have advanced primary care onsite clinics. They may do some bundles for things like joint replacement with providers already. When you actually look at large employers, these things are in place, and their health benefit cost is still going up. So from an employer perspective, this stuff is table stakes, and also I've already kind of done this. Whereas a lot of systems are approaching this as, wouldn't it be great if we could do advanced primary care for you? And it'll depend on the market and the types of employers, but that's kind of problem one is employers are now looking for the next big thing that they can do to apply to their own cost.

Abby Burns (27:36):
So that's one reason why maybe there isn't as much synergy here as it might seem at a high level. What else?

Shay Pratt (27:42):
I think the big thing though with regard to can these models help with health system growth is that a lot of these models are designed to reduce demand, not create more of it. When you have a advanced primary care model, this is where a provider will dedicate primary care, say, clinic space and physician time to an employer's beneficiaries. They might actually have a reduced panel size to provide more attention to the employee population.

(28:11):
Whenever we see these models happen, they start to reduce downstream utilization by a pretty significant degree. So this is the same for a lot of bundled payment programs too, where let's say a health system partners with an employer, and they say, "Hey, we'll give you 10, 15% of a discount on the price of a joint replacement if we can be your kind of preferred partner for your beneficiary population." When that happens, a lot of the times individuals are referred for more conservative therapy, so it actually reduces the amount of surgeries that you're producing.

Abby Burns (28:45):
Which is great for employers who are trying to save on cost, not great for the health system that's trying to grow volumes for this particular patient population.

Shay Pratt (28:53):
Yeah. So if you're already reducing the amount of volume with these relationships, then you actually have to increase the share of volume you get from the employer. And that's very hard to do. The employer has to be kind of aggressive about steering their employees to you. A lot of times they just don't want to do that. They don't want to limit choice or be perceived as doing so. And so you have to work really hard to get the remaining volume to you versus say a competitor. It can be done. It's just really hard, and you need all the stars to align at the same time.

Abby Burns (29:23):
Right. I think I've heard you say before, health systems aren't necessarily super well set up to impress employers or impress employees on whether it's service mix, service experience, et cetera. Why, and what would it take to change that?

Shay Pratt (29:39):
Well, I think part of it is just it's a very complex proposition you're suggesting, which is how can you take what a health system offers and make it cater to a very specific patient segment, like an employer sponsored insurance population? Whereas for health systems, they care for so many different types of patient segments that it would become a huge operational marketing strategy, all the things problem, to be able to appeal to specific segments like that without your cost ballooning. I just don't see how you do that.

(30:09):
But it's a good question. And I think it highlights how health systems and employers often speak different languages when it comes to thinking about healthcare. And health systems often emphasize the advanced nature of their services, or their multidisciplinary care, or their great clinical outcomes when the employer wants to know when is my employee going to be back at work and how much productivity am I going to lose this year? Is there any kind of major cost that I'm going to get hit by that I'm just not expecting that is going to be really hard to absorb?

(30:43):
We do do a thought experiment in our research about what would it look like if you actually had a cancer program that was really tailored to an employer sponsored insurance population. And it would be things like having a working age cancer care pathway where you might actually have oncologists available on the weekends because people work every day. It might require a lot more flexibility in the scheduling such that people can really design things around their employment. These individuals are getting treatment and being employed at the same time. And a lot of cancer care is really organized around, frankly, individuals that are retired. It's an important question because employers are seeing more younger people diagnosed with cancer. So they are absorbing this cost, and they're concerned about their employees and the impact on their overall business too.

Abby Burns (31:30):
From a patient standpoint, an employee standpoint, that sounds great. All those patient-centric changes, and that could benefit any patient, not just a commercial population, but I am reminded of the lens through which we're having this conversation, which is around sustainable health system growth, and making the kind of investments in the operational challenges you're talking about. There's absolutely a value proposition that makes sense, but is it the margin accretive growth? And if I go back to where you started this part of the conversation, it sounds like the reliability of direct to employer as a margin accretive growth avenue is not there yet.

Shay Pratt (32:04):
I think Emily's and my's conclusions for this work where if you're trying to appeal to the commercial population, I think all roads kind of go through the ambulatory and service line investments that we just talked about. You kind of need pretty broad-based innovations along those two areas. Sure, it's important to think about your employer relationships, but I think it's going to be super hard to try to cherry pick volume or try to find productive relationships with specific employer groups in a way that is going to be sustainable. This is all about sustainability.

Abby Burns (32:38):
Yeah. We've covered a lot of potential action steps that leaders could, maybe even should, take to pursue sustainable growth to pursue commercial volumes more sustainably in today's environment. What takeaway message do you want to leave health system leaders and their partners with today?

Shay Pratt (32:57):
I think the main thing I'd ask people to consider is to question their assumptions going in. From a service line perspective, Emily said it best, you're just not that differentiated, and why is that? Are we really catering to the big choice drivers that the market has, or are we relying on how we've always tried to talk about ourselves and our specialty care? Do we have a misalignment there in terms of what the market is really responding to versus what-

Abby Burns (33:21):
Has gotten us here.

Shay Pratt (33:23):
Yeah, exactly. For ambulatory care, I would question assumptions around how an organization's typically thought about the financial importance and profitability of ambulatory care, and whether it's time to let go of some of the long held beliefs about what are the parameters that should govern our ambulatory network investment on campus all the time, HOPD all the time. I think it's time to look at other ideas at the same time.

Emily Heuser (33:46):
I think Shay's exactly right, and it's just a good time to have these conversations internally or with some partners to think about what does the next five years look like if we know that some of these underlying assumptions are eroding. It's time to think about where is there room for creativity and innovation? That's what's going to be the thing that unlocks some of this growth. It's going to be uncomfortable. And so having some of these conversations is the place to start.

Abby Burns (34:12):
Yeah, I really appreciate that you all have pushed the boundaries in the conversation today, not just what is comfortable, not just pointing out like, here's where the playbook has been and why it's not working, but actually let's say some out of the box ideas and maybe they're not going to land or maybe they're not, quote, unquote, "right," but what doors or windows does talking about these ideas open for the future? So thank you both for coming back on Radio Advisory.

Shay Pratt (34:37):
Thank you very much.

Abby Burns (34:42):
I appreciate the way Shay and Emily laid out the hard truths that add degrees and flavors of difficulty to the different ways that health systems are pursuing sustainable growth, as you both face and anticipate very real financial headwinds. But even more so, I appreciate the specificity of the mindset shifts that they offered and the questions that those shifts beg. Are you asking the right things of your ambulatory assets and is your portfolio adequately balanced? How are you differentiating on patient experience within your service lines? Is D2E actually in line with your growth goals? And if so, how do you need to think differently about delivering on the value prop employers and employees are looking for? We just scratched the surface in this conversation. There is so much more to explore down each of these avenues. Because remember, as always, we're here to help.

(35:48):
New episodes drop every Tuesday. If you like Radio Advisory, please share it with your networks, subscribe wherever you get your podcasts, and leave a rating and a review. Radio Advisory is a production of Advisory Board. This episode was produced by Rae Woods, Chloe Bakst, Atticus Raasch, and me, Abby Burns. The episode was edited by Katy Anderson, with technical support provided by Dan Tayag, Chris Phelps, and Joe Shrum. Additional support was provided by Leanne Elston and Erin Collins. Special thanks to Ellie Wiles. We'll see you next week.